In the first executive order of its kind, issued on March 9, US President Joe Biden directed federal agencies to coordinate their efforts in creating cryptocurrency regulations.
As reported, according to a senior administration official who previewed the directive, the Biden administration sees the exploding popularity of the cryptocurrency as a demand to act quickly to examine the risks and benefits of digital assets. The news comes at a time when some experts speculated that the Kremlin may use crypto to evade sanctions imposed by the West.
Last year, it was reported that several federal agencies were evaluating the risks and opportunities posed by digital currencies, according to some people familiar with the situation, and that senior administration officials have held several talks on the subject. .
Around the same time, it was also reported that the Federal Reserve Board (FRB) had prepared a discussion paper that examined the benefits and drawbacks of establishing a central bank digital currency (CBDC) in the United States, and that it was open for public comment. Open till 20th May this year.
However, the Treasury Department and other federal agencies will evaluate the impact of bitcoin on financial stability and national security as part of the order signed on March 9. It needs to be understood that efforts by the US government to regulate crypto business are focused on consumer protection, financial stability, illicit use, leadership in the global financial sector, financial inclusion, and responsible innovation.
The executive order, which is the first of its kind to focus solely on the fast-growing digital asset sector, mandates federal agencies to better communicate their work to the industry, but does not specify any specific stances. does not do what the administration agencies want to take. Similarly, the directive does not mention any new rules that crypto companies must follow.
However, the move comes as lawmakers and administration officials become concerned that Russia may be using cryptocurrencies to escape the effects of sanctions imposed on its banks, oligarchs and the oil industry as a result of the Ukraine invasion. Used to be.
The financial industry, crypto traders, speculators and lawmakers, who have compared the cryptocurrency market to the Wild West, were all waiting for the executive order, which was originally reported to take effect in October 2021.
According to the government, about 16% of adult Americans – or 40 million people – have invested in cryptocurrencies, and 43% of men aged 18 to 29 have invested in digital currency.
The focus of the executive order has long been assumed to be on national security, mentioned a few times in the fact sheet describing the order. As per reports, an administration official said that the government has started working on resolving these issues.
It was also reported that both the Justice Department and the Federal Bureau of Investigation (FBI) have relatively new departments for crimes using cryptocurrencies.
Most cryptocurrency networks are designed to make identification more difficult and to make them more decentralized. An official reportedly said to address this, the presidential order “represents a continuation” of the US’s efforts to set financial and technology standards in other countries.
According to the fact sheet shared with journalists, the United States Department of Commerce will need to develop a framework to address crypto-related concerns and guarantee that the US will remain a leader in the use of digital asset technology. Additionally, other agencies should be able to use this framework to develop their own crypto policy or operational methods.
However, the Treasury Department said on March 8 that its Financial Literacy Branch would work to develop consumer-friendly content to help people “make informed choices about digital assets.”
Nellie Liang, the United States’ Under Secretary of the Treasury for Domestic Finance, said: “History has shown that, without adequate safeguards, forms of private money have the potential to pose risks to consumers and the financial system.”
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